What are the main types of crypto wallet?
An SEC investor bulletin sorts wallets two ways: who holds the keys (you, or a custodian) and whether the keys are online (hot) or offline (cold).1 Wallets also come as phone, browser and desktop apps, hardware devices, smart-contract accounts, and watch-only views that hold no private keys at all.2,3,4
Who holds the keys, and are they online?
An SEC investor bulletin sorts wallets with two questions.1
- Who holds the keys? You do, which is called self-custody. Or a custodian, such as an exchange or a custody firm, holds them for you, which is called third-party custody.1
- Are the keys online? A hot wallet is connected to the internet. A cold wallet is not: it is typically a physical device, such as a USB drive, or even a piece of paper.1
The two questions are separate: the bulletin notes that hot and cold options exist for both kinds of custody.1 Module 8, Self-custody, covers both questions in full.
The forms wallets take
ethereum.org lists the main forms:2
- Hardware wallets. Physical devices that keep your crypto offline.2
- Mobile apps. Wallets on your phone, usable anywhere.2
- Browser wallets. Web apps you use in the browser.2
- Browser extensions. Add-ons for your browser that connect your account to apps.2
- Desktop apps. Wallets for Windows, macOS or Linux.2
Mastering Bitcoin notes that a wallet app doesn't have to hold every key. Some keep only public keys, and get signatures from a separate device, such as a hardware wallet.5
Smart-contract accounts
Everything so far is an ordinary account controlled by one private key. ethereum.org describes these simply: with the private key you can do anything, and without it you can do nothing. Lost keys can't be recovered, and stolen keys give a thief instant access.3
A smart-contract wallet works differently. A smart contract holds the assets and approves transactions, so its code can add rules. ethereum.org's examples include sharing an account's security across trusted people or devices, and recovering the account if you lose the keys.3 Contract accounts have no private key of their own.6 Module 9, Multisig and smart accounts, covers them.3
Watch-only
A watch-only wallet has addresses or public keys but no private keys. It can watch balances and payments, but it can't spend.4 Lesson 5 showed how BIP-32 lets an auditor see every transaction without a single secret key.7
"Seed phrase", "recovery phrase", "secret recovery phrase" and "mnemonic phrase" all mean the same list of words.1,8
- Crypto Asset Custody Basics for Retail Investors – Investor Bulletin. US Securities and Exchange Commission, Office of Investor Education and Assistance (Investor.gov), 12 December 2025.
- Ethereum wallets explained. ethereum.org, page updated 24 February 2026.
- Account abstraction. ethereum.org, page updated 24 June 2026.
- Mastering Ethereum, 2nd edition, chapter 5: Wallets. Andreas M. Antonopoulos, Gavin Wood and co-authors (CC BY-NC-ND 4.0 for its first 12 months, then CC BY-SA 4.0), GitHub, checked 22 October 2026.
- Mastering Bitcoin, 3rd edition, chapter 5: Wallet Recovery. Andreas M. Antonopoulos and David A. Harding (CC BY-SA 4.0), GitHub, December 2023.
- Ethereum accounts. ethereum.org (developer documentation), page updated 6 August 2026.
- BIP 32: Hierarchical Deterministic Wallets. Bitcoin Improvement Proposals (github.com/bitcoin/bips), assigned 11 February 2012.
- Ethereum security and scam prevention. ethereum.org, page updated 6 June 2026.
General education built from the publicly available sources listed above. Not financial, legal, tax or investment advice. Naming a company, project or regulator is not an endorsement either way. Last checked 2026-10-22. Terms and disclaimer.